Industry Research and Technology, No. 122, 2 December 1971

WEEKLY

industry

researcH

~---~-~ X/859/71-E

and technology

REPRODUCTION AUTHORIZED

Brussels, 2 December 1971

No. 122

**

The agreements for cooperation concluded on 23 November 1971 by the European Community and the 19 European research

ministers invited to Brussels by the Community by no means

add up to that SINGLE SCIENTIFIC AND TECHNOLOGICAL POLICY

which Europe must adopt in order to "optimize" the

utilization of its human and financial resources. But

at least they constitute a first, experimental step in this

direction. A short note on this subject can be found in

ANNEX 1.

**

The Commission of the European Communities is devoting close attention to the tendency towards concentration in a

certain number of sectors. It will not fail to apply

Article 86 of the Treaty to operations aimed at concentrations

which it considers illegal, i.e., those which impede the

MAINTENANCE OF EFFECTIVE COMPETITION in a large part of the

Common Market. It recently recalled this in a reply to a

written question by Mr Vredeling, a Dutch member of the

European Parliament, dealing with legislation governing

concentrations. Information on the regulations relating

to competition within the Community can be found in ANNEX 2.

This bulletin is published by the. Directorate General Press and Information of the Commission of the European Communities

For further Information please apply to the

Commission of the European Communities Oirec:torate-General for Press and Information Division for industrial and sc:ientific: information 200, avenue de la Loi

: j

' . . . _ ,<( ' ! ' • I~·

1 BERLIN 31 Kurfiirstendamm 102 tel. 8864028

53 BONN

ZitelmannstraBe 22 tel. 22 60 41

1040 BRUSSELS 200, rue de la Loi tel. 350040

The information arid arti~les published in this Bulletin concern European

scien-tific cooperation and industrial development in Europe·. Hence they are not simply

confined to reports on the decisions or vie~s .,of t/y:_ Com"fiss.ion

,of ~he

European

Communities,' but: cover the whole field" of questions discussed in the different

circle~ ~~ncerned.

• • # • • •

...

-:·

·, .

. ' ,_: ,,'_,,

I,,·

i:

PRESS AND INFORMATION OFFICES OF THE EUROPEAN COMMUNITIES

GENEVA LUXEMBOURG ROME

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THE HAGUE NEW YORK 10017 Torre A, Casilla 1 093 Edif. Torres de TaJamar-Apt. ~ 22, Alexander Gogelweg 155 East 44th Street Avda Providencia 1072

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WASHINGTON, D.C. 20037 LONDON SW 1 PARIS 16e 2100 M Street, N.W. 23, Chesham Street 61, rue des Belles-Feuilles Suite 707

- 2 -

X/859/71-E

**

In renewing the ,!!IiQE...E/illq§O.QI,~-li!!lll2 which, after 10 years of

existence, will enter a new phase of developm0nt in January

19721

the

Community has equipped itself with an effective weapon in the battle against unemployment. A short note on the renovated social fund,

which it is hoped will play an active part in the Community's

employment policy, can be found in

J:!NEX

.3.

**In real terms,~ PJP3.M1<L~EA!!,Q!.lJ1P....]E..J!gJtQ£MENT

...

~Til.§J'ENDil'{Q.1!

,!H_UQJ:.~-..1! between

1967

and

1971

showed only a very slie;ht inoreo.se.

T'ne ratio of public R&D expenditure to the GNP - 15~ in the Community

in

1967 -

wo.s a.s little as

0.9%

in

1970

and would appear unlikely to

ret,xrn to its initio.l level in 1971 de~ite a reversal of this trend.

However, this tendency ho.s varied greatly, depending on t~e ")Ountries

involved and the different R&D aims. .hn analysis of tllig trend,

carried out by the Committee on Scientific and Technical !~P,'3.::a.rch

Policy (Aigrain Group), has just been published in Fre:rwn c...."ld German

under the title of "Public funding of research and development. in

the member countries -breakdown by objectives,

1967-71".

! summ~J

of this document was published in "Industry, Research and Technology" ₁

No. 107.

** The SPROUT INHIBITION IN POTA'roES BY ME.1NS OF IRRADIATION was the _{tj!>, .-•::sme--==-~ ..,...,}

#"C"pS" . . . - - - - ~ ,...

---'P"':a'T-

....

= ... ~

subject of a number of industrial experiments conducted under the.

research and development programme of the Commission of the European

Communities. A decision on a second joint programme for the

industrial processing of irradiated potatoes has ~ust been reached

- 3 -

X/859/71-E

**

Five new 'I!ECHNIQ!L_:[QT!§, each summarizing a result obtained under Euratom research programmes, have been issued by the Commission of the European Communitieso The purpose of these texts is to enable industrial firms to assess the prospects for the industrial

exploitction of the results described. The subjects of these new technical notes are as follows:

No. 836.

L

method for producing an electrical and mechanical connection between a Ge-Te SQmiconductor and a metal electrode.

No. 068. A circuit arrangement for digitalizing an analog value of short duration.

No. 1062. A procesa for preventing carbon deposits on iron and steel surfaces in an environruent containing carbon monoxide.

No. 61/C. Reootc-oontrolled sectioning machine.

No. 49/C. ll!etrology rig.

**

The D::!;_,f?..rr:_ORTlO!..Q.[£0~IJ~.I.Ql! and its repercussions on the Common r.ia.rket formed the subject of a study the findings of which have just been published as part of the series "Competition - Harmonization of Legislation" ( 1971, No. 11) •

.!:,L~ was the subject of a meeting arranged by the

Directorate-General for Industrial, Scientific and Technological Affairs of the

Commission of the European Communities in ~ssels on 28-29 October,

in conjunction with the In·~erno.tional Atomic i:nergy Commission. A total of 32 delegates, representing 12 countl'ies and the European Nuclear Energy Agency (ENEA), o.ttendcd this meeting, the first of a. series of special meetings covering various fields relating to

- 4 -

X/859/71-E

**

A

_'JJOTfo. OtJTtUT_

Q¥.. ...

87.J..2.2!L

OQ,Q. .. ':rQ.l!S

9.t

STEEL

JN

T!!.~ ,9..0~TY during the first

10

months of

1971

signifies a drop of

5.8%

compared with the same period in

1970 (92

9

621,000

tons). The table below shows steel production trends in the various Community member countries:

' l I ! I I

jBelgiumrFrance German~ Italy !Luxem-:Nether~

Comm-1 ₁ Jbourg I lands uni t;y

;anU:....;.-~ctober

1977 ....

~~,849

18,847 34,756

~4,201

14,428 4,213 67,294

January-October

1970 110,677 19,876 38,525 h4,68314,643 4,199

~2,621

Relationship between

I

!

output during Jan/Oct

1971

and Jan/Oct

1970

(%)

+1.6

Relationship between output during October!!

1971

and October

1970

1

(~)

-4.5

Relationship between I output during October!

1971

and September I

1971

(5~)

:

-9.3

Forecasts for ₁

November

1971

(1000 j

tons) ... 1

1r~52

-5.2

-9 ..

8

I

-1.1 -12.7

I

I

' +5.0

l

-4.4

j

I

2,1091

i

-3.3 -4.6

-0.3

+7.0

I

-i

~16.6

I

I

I

+6.0 j-5.3 +13. 7

!

_!

I

1

,605! 420

I

474

-5.8

j

-3.9

1

i

- 1

In addition, the total number of .Q.f._llER.P f..L:i.Cr:D :gt ~ .. E .... ~.1'!Pl:

_5ECJ:9!

(excluding special steels) for July, August and September

1971

were as follows:

i

~---~---~--*-

_j

_August

--,

j September 1

Supplier _I

=·---

1P'T7

w~

Total ECSC

No~ember countries

I

I

Overall total I

I

July

5t133

1,239

6,372

... -.j...

.. ...

+ -

~-4

I

3,944

I

1,189

4,360

977

5,337

5,133

J

.__. _ _ _ _ _ _ _ _ _ _ _ , _ _ _ _ _ _ ...~-... ~ ... a ,... $C

X/859/71-E

ANNEX

1.~.1

• -== ...

THE FffiST STEP

.. - - . = ...

The agreements for cooperation concluded on 23 November

1971

by the European Community and tho

19

European ministers responsible for research invited to Brussels by the Community are, of course, modest. They relate to seven coDaborative projects, with a total expenditure of

21,156,000

units of account, spread over two or five years, depending on the project (see '1_{Industry, Research and Technology" No.}

120).

_As

has been stressed by Mr Spinelli, the I·lembor of the European Commission with special responsibility for industrial affairs and research, they by no means add up to the overall science and technology policy that Europe needs if it is to make the most of its resources in men. and money. However, they are at least a first step forward, though largely an

experimental one, in a number of respects, namely:

1. The type of project decided on, which tends to be less concerned with prestige, as was too often true in the past, than with more

11_{down-to-earth}11 _{ends aimed at meeting the needs of society and} social advance (communications, ecology, the supply of fresh water, etc.).

2. The methods of implementing the projects, whioh will differ from one to c:mother.

3. The flexibility in the manner in which the countries involved will porticipate (the number varies from one project to another and mcy

change again, since each country has the right to join in a project that is e.lreadJT under way).

J~y lessons learnt in the course of this first group of projects will

facilitate future decision-making. The participants at the Conference

of Nineteen also voted unanimously in favour of a resolution 11_confirming

their willingness to cooperate, on a EUropean basis, in carrying out practical research and development projects in the scientific and technical fields, and to adopt, for that purpose, the most flexible forma of ooopora.tion possible1in particular coordination of the work

X/859/71-E

Speaking for the Community, Mr Spinelli laid emphn.sis on the absurd nature of the existing decision-making process: the amounts spent on

the preliminaries needed for a. programme to be adopted sometimes

exceeded those required to carry it out. Only if the enlarged Community proved capable of formulating and implementing a genuine and comprehensive research policy would it be in a. position to offer, to the whole of

Europe, cooperation that goes beyond the hesitant first step just taken.

*

*

*

It has been decided to proceed with seven collaborative projects (see ttindustry, Research o.nd Technology" No. 120), relating to:

1 • The creation of a pilot European da.ta.-tra.nBI'.ilission network

intended to prepare the way for the establishment of operational networks at a. later date.

2. In the field of telecommunications, a stu~ on the propagation of radio waves aimed at improving the efficiency of aerials.

3.

In the field of metallurgy, two projects with industrial objectives, and spanning five years, one on materials for gas turbines, the other on materials for use in deso.lina.tion plants.

4.

Three projects in the field of pollution: (a.) the removal of sulphur compounds from the atmosphere; (b) the development of a versatile detection system covering the whole r~nge of organic substances, for identifying orgnnic micropollutants in water and determining their concentration; and (c) a stu~ aimed at

standardizing existing methods of characterizing sludge.

In addition, the Ministers confirmed the brief assigned to a group of senior officials which will continue drafting and finalizing agreements for cooperation on the following four subjects:

1. The setting-up of c European Information Cel1.tre on computer programs. 2. The est.::~.blishL1ent of a. !.1edium-Ro.nge V'iea.ther Forecasting Centre.

3.

~ study on electronic traffic aids.

)

X/859/71-E

A greater VD.riety of goods, of better quality and at a louer price:

these are the advantages the consumer gains when competition works well.

Open competition between firms gives them an incentive to rationalize

production, simplify distribution networks, improve the quality of their

products and out down profit margins.

Fair competition is the basic principle of the Coomunity economy.

To

guarantee firms and ind.ividuo.ls oompnro.ble business conditions throughout

the Community territory, the tariff duties and quotas which constituted

the most flagrant discriminations have been abolished and notion by the public authorities has been gradually harmonized in all matters of

domestic taxa.tior.., wages and salaries, e:ooio.l security payments, services,

interest rates, cnpit~l markets in short, every item m~~ing up a firm's costs.

The Commission of the European Communities is required to ensure that

fair competition is observed in the Common Market, and has been given

all the necessary powers to intervene when frGe competition is jeopardized,

either by state rids to certain firms or business sectors, by o~eements

or understa.ndings between firms, by a large fim' s abusing the dominant

position which it occupies in its pa.rtioulcr seo·~or, or by the various

restrictions on trade which the governments may still practise after

abolishing tariff duties (administrative complications, health or

technical standards, discriminatory taxation, etc.).

The Commission therefore has the authority to ban any measure adopted or

contemplated by the firms in Mer.tber States or by the States themselves

when it is likely to restrict the freedom of im.:::·a-Comr:ltmity trade, in

particular:

1. fe~ee.!lf.e.tltf!

Under the ~Teaty, ngreements are forbidden by which a nwnber of firms

arrange to shc..re out markets or sources of supply amonmrt themselves,

linit production cild in'irostmont, f;.:z: pricco end ronder the conclusion

of contracts contingent on the acceptance of additional services

X/859/71-E

.fJrnEX 2

p.

2

Since 1962, all the agreements which are concluded between two or mere firms and are likely to fall within the scope of Community rules must be declared to the Commission, which then either takes a favourable decision legalizing their existence or decides to

ban

them, thus causing their

annulment or amendment. Undeclared agreements may be subjected to

enquiries when a complaint is lodged. The Commission may accompany its bans by fines and penalties.

Since it is difficult to define accurately the concept of an agreement, which is a reflection of changing economic circumstances, the Commission enjoys wide powers of judgment; it may accordingly exempt from the ban certain agreements whose economic advantages to the public at large outweigh their restrictive effects, particularly when such agreements improve production or distribution without jeopardizing competition in too large a portion of the market for the product in question, provided they are of benefit to the consumer. (Thus contracts for exclusive licences restricting competition have been authorized, mainly because of the complexity of the products marketed).

Moreover, agreements having only a negligible effect on competition are not subject to the ban.

B.1

this decision, the Commission sought to favour agreements concluded between smaller firms with a low turnover concerning a small part of the market.

The Commission also decided that certain cooperation agreements between firms would not come under the ban. These are:

- agreements governing cooperation in accounting matters, joint backing of loans;

joint debt-collecting agencies7

joint. consultancies on business management or taxation matters, - joint execution of R~ projects;

- joint use of production plant, storage equipment or transport, joint sales and after-sales service by firms which are not in

competition with one another or small firms which are in competition; - joint advertising1

X/tS59/71-E

ANNEX 2

p.3

From 1962 to 1971, the Commission had to ban only five agreements. In

addition, however,

589

agreements between firms ha.d to be amended to

obtain Commission approval and there were

36

volunta.r,y annulments,

2. Abuse of dominant positions

The Commission of the European Communi ties can ta.k:e action a.ga.inst

concentrations when the firm involved holds a. dominant position, by

virtue of the scale of its production, in the market for the products in

which it specializes, in a. large part of the Community and abuses this

dominant position to obtain a.n a.dva.nta.ge over its customers, suppliers or competitors (e.g., fixing of prices and conditions of sale).

It is compulsory to notify the Commission of concentrations and to

obtain its prior agreement only for the coal and steel industries, as

laid down in the ECSC Treaty to which they are subject. However, a

move towards ma.k:ing such notification and prior approval compulsory for

all firms has been made in the European Parliament. A revision of the

Treaty establishing the European Economic Community would be necessa.r,y 1

however, to give the Commiss:ion.powers of this kind.

3.

State aids

The States hamper free competition when they grant aid to firms or

certain business sectors in varying forms. After investigating the

matter, the Commission may require the abolition of such aids when they

have serious consequences on competition in the Common Market (e.g., the

German law on taxation of road transport, 1971).

However, aid of a. social nature, aid granted to relieve disasters and

aid to the regions of Germany affected by the division of the country are

allowed as of right. Aid for regional development, aid to certain

sectors of the economy (coal mines, ship,ards) and aid for projects of

Community interest may be authorized by the Commission. Moreover, the

Council of Ministers may decide by unanimous vote that the granting of

X/859/71-E

THE SOCIAL FUND REC.AST INTO AN EFFICIENT TOOL FOR SOCIAL PROGllli"'SS • • • • . , . . . . • • • • • ..,...,, • m- s•r• =• =-er ** =•=-= '*•**'...,..,•••••"*

To help bring social progress abreast of the technological evolution that

has marked economic growth in the last decade, the Community has now

acquired an effective weapon with which to intensify the fight ~.inst

unemployment and short-time working. For this is where the European

Social Fund will henceforth be used. ~~ter ten years of existence, it

is to enter a new stage of growth on 1 January 1972. This change marks

the fulfilment of a reform decided upon last February by the Council of

Ministers, on a proposal by the Commission of the European Communities,

in order to meet the Community's needs.

Since the Fund first started up in 1961, circumstances have changed

considerably. The opening of the frontiers between the six countries,

the lowering of customs barriers all over the world, and the strides mnde

by new techniques have undoubtedly stimulated industrial growth, but they

have brought with the111 the need to adapt the workers to the increasing

changes in the economy and to maintain or create a structural c..nd

regional balance between the various parts of the Community. The

Community h~d to find an instrument flexible enough to meet the demands

of rapid, harmonious economic growth.

So the Social Fund, sloughing its old skin, is no longer an inter-state

compensation fund for the benefit of the uneuployed only. It has become

an ~<l,t.i;~e .. etl.ep!etnt _in .tP.Et C.OrnplJ.lRij;~'l.L-.~.P).pm_~i.cy, and is to help to ensure the best possible utilization of the entire active population, in

line with the Community priorities. The Fund~ initial pt~osc is still

to promote, within the ComrJunity, employment facilities and mobility of

workers, both geographical and from trade to trc.de. But this purpose

is now framed in a materially altered political context. It is now

axiomatic that social and econoraic affairs must go hand in he.nd. In the

future the activities of the Social Fund will be dominated by an employment

policy aimed at easing the structural adjustmen·l; of the economic sectors

and firms to the dema."lds of progress ro1d ensuring a bo.lanced, harmonious

development of the regions, mcanuhilo helping certain herd-to-fit

X/859/71-E

A Community institution with limited financial resources, the Social Fund

obviously cannot solve the employment problems by itself. Its action

will therefore be selective. Two types of action are pla'lnecl:

1. Measures in support of decisio:r..s by the Council of l.!iniste~s or of

specific joint projects to imp:::-ove the balance of the emplnyment

market.

2. StepD to rectify a. certain nuniher of serious OO?lcy!llent ~i"f.1:1.tions,

chiefly in b~kwa.rd or declini:n.g re~ions and in some br-:mc~~Gs of

activity particularly affected by technical progress (5~ of the

a~~ilable funds will be e~~arked for this type of action ov~r the

next five yefl..rs) •

The field in which these two types of aid will bo granted by the Fund has been consiC.ere.bly widened: in ai:"ition to aid for retraining c-~.1J.

relocation, there e..re new aids whic~ will reQ~Ce the burdA~ of ccst of setting up occupational training centres in the baohlo.rd rcgio!".o..s and will

cover, under certain conditions, the expenses of resettling i:-.. cu.rred by

workers who are obliged to move home. They will also assist c9rtain

classes of underprivileged workers either to acquire occupati.on"11 skills

-in the case of handicapped people - or to ret::1.-in their previous wage

rate - in the case of elderly l·mrkers obliged to change their type of job.

The renovated Social Fund has become an essential instrument of the

employment policy: the Commission of the Europeon Communities, which

administers the Fund, is therefore responsible for seeing that i~s action

is in line with Community policy.

The renovated Social Fund is also characterized by tho speed of its

action (which will bo carried out in the form of instalments, in step with the progress of operations). and by its flexibility- and in